Al Jazeera's Anita McNaught, reporting from the Nafusa mountain range, said the rebels claimed to have gained ground in their fight against Gaddafi's army after NATO air strikes.

"A battle raged all day [on Monday]. There are deaths on both sides but Gaddafi's forces retreated," our correspondent said from the remote region that is largely inaccessible to journalists.

"Our town is under constant bombardment by Gaddafi's troops. They are using all means. Everyone is fleeing," Imad, a refugee, said while bringing his family out of the mountains and into Tunisia.

Three rebel fighters were killed in the bombardment of Nalut, a town close to the borders with Tunisia.

Unconfirmed reports said Gaddafi troops were amassed near the town in preparation of an attack.

Misurata also won no respite from two months of bitter siege as Gaddafi's forces bombarded the city after pulling out of the city centre.

NATO, on its part, flattened a building inside Gaddafi's Tripoli compound, in what Libyan officials said was a failed attempt on their leader's life.

NATO said its attack on the building in the Gaddafi compound was on a communications headquarters used to co-ordinate attacks on civilians.

A Libyan spokesman said Gaddafi was unharmed, and state television showed pictures of him meeting people in a tent, which it said had been taken on Monday.

Gaddafi's son Saif al-Islam said the Libyan government would not be cowed.

"The bombing which targeted Muammar Gaddafi's office today ... will only scare children. It's impossible that it will make us afraid or give up or raise the white flag," he was quoted as saying by the state news agency, Jana.

Libyan television, without giving details, said late on Monday that the "crusader aggressors" bombed civilian and military sites in Bir al Ghanam, 100km south of Tripoli, and the Ayn Zara area of the capital, causing casualties.

A Reuters correspondent heard explosions in Tripoli.

Libyan television said foreign ships had also attacked and severed the al-Alyaf cable off Libya's coast, cutting communications to the towns of Sirte, Ras Lanuf and Brega.

'Bodies everywhere'

People in Misurata emerged from homes after daybreak on Monday to scenes of devastation after Gaddafi's forces pulled back from the city under cover of blistering rocket and tank fire, said witnesses contacted by phone.

Nearly 60 people had been killed in clashes in the city in the last three days, residents told Reuters by phone.

Although rebels' celebrations of "victory" on Saturday turned out to be very premature, it was clear they had inflicted significant losses on government forces in Misurata.

"Bodies of Gaddafi's troops are everywhere in the streets and in the buildings. We can't tell how many. Some have been there for days," Ibrahim, a rebel fighter, said.

Rebel spokesman Abdelsalam, speaking late on Monday, said Gaddafi's forces were trying to re-enter the Nakl Thaqeel Road, which leads to Misurata's port, its lifeline to the outside.

"Battles continue there. We can hear explosions," he said by phone. He said Gaddafi's forces positioned on the western outskirts of the city had also shelled the road from there.

Another rebel spokesman, Sami, said the humanitarian situation was worsening rapidly.

"It is indescribable. The hospital is very small. It is full of wounded people, most of them are in critical condition," he told Reuters by phone.

US officials said relief groups were rotating doctors into Misurata and evacuating migrant workers.

Mark Bartolini, director of foreign disaster assistance at the US Agency for International Development, said aid organisations were aiming to create stocks of food in the region in case Libyan supply chains break down.

Italy to join bombing

In another development, Italy said it would join the British and French in carrying out bombing attacks on Libya.

Geographically the closest major NATO member state to Libya, Italy had until Monday only provided bases and reconnaissance and monitoring aircraft.

The surprise decision immediately opened a fissure in Italy's coalition government.

However, rebel-led the National Transitional Council [NTC] welcomed the decision.

Abdul Hafeedh Ghoga, vice chairman of the NTC, stated: "The people of Libya welcome the government of Italy’s decision to take part in strategic bombing raids against the Gaddafi regime. The Gaddafi regime has demonstrated time and again that it cannot be trusted. Its continued shelling of Misurata, despite claims of a withdrawal, makes that very clear. Italy's help during Libya's time of need is greatly appreciated."

The African Union, meanwhile, held separate talks on Monday with Abdelati Obeidi, the Libyan foreign minister, and rebel representatives in Addis Ababa to discuss a ceasefire plan.

The rebels had earlier rebuffed an AU plan because it did not entail Gaddafi's departure, while the United States, Britain and France say there can be no political solution until the Libyan leader leaves power.

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